286. Evidence has been provided of payments by
Mr Zaiwalla to, or on behalf of, Mr Vaz in four different categories:

 cash payments to Mr Vaz of £1,000
or £2,000 in 1993 or 1994

 support of £500 each for two gala
dinners associated with Mr Vaz in the summer of 1998

 a payment of £250 to Mr Vaz's office
account in January 1993

 a payment of £200 to help defray
the costs of publishing a constituency calendar.

287. Both Mr Zaiwalla (initially) and Mr Vaz
(almost throughout)[170]
have denied that any payments were received from Mr Zaiwalla by
Mr Vaz either personally or for his benefit or that of his office.

a)Cash payments
in 1993 or 1994

288. Mr Milne says that a cash payment of £2,000
intended for Mr Vaz was collected from the premises of Zaiwalla
& Co by a young man from Mr Vaz's office. Mr Milne's recollection
is that this payment was made in "April or May 1994",
but he adds that it was only one of a number of such payments
to Mr Vaz.

289. Mr Brown also recalls a payment to Mr Vaz
in 1994, although he thinks it was for £1,000 rather than
£2,000, as stated by Mr Milne. He says it was handed directly
to Mr Vaz, not to his assistant. There is more agreement over
timing, with Mr Brown, whilst not remembering the exact date,
placing the payment "prior to May 1994"when Zaiwalla
& Co moved to new premises. Both men also agree that the payment
they are able specifically to recollect was intended to support
Mr Vaz's office in some way.

290. Mr Brown's evidence, however, shows a degree
of uncertainty and confusion. For example, commenting in his letter
to me on the suggestion in a newspaper report that Mr Vaz had
refused to accept a payment from Mr Zaiwalla in the form of a
cheque and had instead insisted on cash, Mr Milne says: "This
may or may not be the case, I simply cannot be certain, though
I suspect that could be the case".

291. Similarly, during his tape-recorded conversation
with Mr Milne, Mr Brown initially disclaims any knowledge of a
payment to Mr Vaz. When Mr Milne puts it to him: "You certainly
did hand over an envelope at some stage", Mr Brown replies
"Or so I am told, but I still don't remember it." Only
after Mr Milne mentions the fact that he has been questioned by
The Sunday Telegraph specifically about alleged cash donations
to Mr Vaz by Mr Zaiwalla does Mr Brown support Mr Milne's account,
but with the difference that Mr Brown maintains that the payment
which he remembers was handed to Mr Vaz personally.

292. Moreover, Mr Milne's evidence that the payment
was collected on Mr Vaz's behalf by a young man from his office
called Mark is contradicted by Mr Vaz, who points out that no
one by that name worked for him during the period in question.

293. The only documentary corroboration of any
payment by Mr Zaiwalla to Mr Vaz of the kind (and the amount)
alluded to by Mr Milne and Mr Brown[171]
is the extract from Zaiwalla and Co's cashbook for 9 February
1994, indicating that a cheque was drawn for £1,000 and that
it was ascribed in the 'narrative' column to "cash (K Vaz)".
However, no receipt for the payment has been produced, even though
Mr Zaiwalla says it would have been normal practice to request
one in such circumstances.

294. After his initial blanket denial of any
payments "by cash, cheque, [or] in kind" to Mr Vaz,
Mr Zaiwalla's explanation for the reference to a £1,000 cash
withdrawal is that it was a donation to a charity suggested by
Mr Vaz. Mr Vaz's recollection is not so clear, but he thinks that
this is the likeliest reason for the payment. However, neither
he nor Mr Zaiwalla recall the identity of the charity, nor have
they retained, or sought to retrieve, any records which might
have assisted their memory, although Mr Zaiwalla thinks the intended
recipient may have been an Indian disaster appeal fund.

295. It is possible that Mr Milne and Mr Brown
are recounting different versions of the same event. But this
is unlikely given that the divergences in their evidence are on
material pointsthe amount of the payment and who collected
it. Certainly, Mr Milne believes, despite his encouragement to
Mr Brown to "get our story straight", that Mr Brown
is talking about a different payment. To complicate matters further,
Mr Zaiwalla's evidence concerning the cash payment of £1,000,
which he now acknowledges, is that it was collected by two
men from acting on Mr Vaz's authoritynot one as recalled
by Mr Milne.

296. Mr Zaiwalla says that Mr Milne is actuated
by malice because of the circumstances of his departure from Mr
Zaiwalla's firm and the continuing legal dispute between them.
In turn Mr Milne, somewhat surprisingly in view of his attempt,
during their telephone conversation, to co-ordinate his evidence
with Mr Brown, challenges the latter's credibility by stating
that he, after he left Zaiwalla and Co in 1994, served a term
of imprisonment for theft from the firm.

297. In summary, the evidence that a series of
payments was made to Mr Vaz by Mr Zaiwalla is inconclusive. In
so far as their recollections are specific, Mr Milne and Mr Brown
diverge over material details. They could be describing a single
event from differing perspectivesbut that seems implausible.
If they are referring to separate occasions on which a payment
was allegedly made, the force of their evidence is weakened by
its mutual inconsistency and lack of corroboration. Mr Vaz strongly
denies receiving payments from Mr Zaiwalla intended for him personally.
With one exception, I have seen no documentary evidence of the
payments which Mr Milne and Mr Brown say they either witnessed
or helped to arrange. The exception is the cash withdrawal of
£1,000 which Mr Zaiwalla says was intended as a donation
to a charity nominated by Mr Vaz, an explanation which Mr Vaz
accepts as likely to be the case.

298. I am satisfied, on the basis of the information
I have received, including the documentary evidence, that Mr Zaiwalla
did make a cash withdrawal of £1,000 in February 1994 which
in his mind was connected with Mr Vaz. Both Mr Vaz and Mr Zaiwalla
say this sum was intended as a charitable gift, and Mr Zaiwalla
gives as the reason for recording Mr Vaz's name on the cheque
stub the fact that it was Mr Vaz who had suggested to Mr Zaiwalla
the idea of such a donation.

299. The evidence which might have clarified
the purpose of this transaction has not been provided to me. Mr
Vaz has said that he wished to encourage Mr Zaiwalla to become
more involved in the Asian community and that may well be the
case. For his part, Mr Zaiwalla may have felt (or may have been
told) that this was what was expected of him by virtue of his
position as a prominent Asian businessman. What remains odd, and
as yet unexplained, is the fact that Mr Zaiwalla handed over a
substantial amount, in cash, to a person (or persons) he assumed
to be acting with Mr Vaz's authority, without apparently taking
any steps to ensure that the money actually reached its intended
recipients. Nor has any adequate explanation been adduced as to
why a charity would wish to receive such a donation in cash.

300. I am bound also to record my surprise that
both Mr Zaiwalla and Mr Vaz, when first asked by me, denied that
Mr Zaiwalla had made any "cash payments of any kind"
to Mr Vaz. Even if my question was interpreted literally as referring
only to a payment meant for Mr Vaz's personal benefit, I would
have expected both Mr Zaiwalla and Mr Vaz to have mentioned Mr
Zaiwalla's £1,000 donation to a charity nominated by Mr Vaz
in any reply intended to be comprehensive and helpful to my inquiry.

301. Neither Mr Vaz nor Mr Zaiwalla have been
able to assist me in discovering the identity of the charity which
received Mr Zaiwalla's donation. I have, however, been provided
with no evidence that Mr Vaz, either personally or through his
Parliamentary office, benefited from Mr Zaiwalla's £1,000
payment in February 1994.

b)The two Gala
Dinners in 1998

302. Mr Zaiwalla says that, in July 1998, he
supported two events organised by the Asian Business Network,
in each case by purchasing a table at a gala dinner for £500.
This is confirmed by photocopies of the cheques and counterfoils
provided to me by Mr Zaiwalla. Mr Vaz, as the Honorary President
of the Asian Business Network, was a supporter of both events;
beyond that it is not clear what his role was in persuading Mr
Zaiwalla to sponsor them. The second dinner, at any rate, was
sufficiently closely associated in Mr Zaiwalla's mind with Mr
Vaz for his name to have been noted on the cheque counterfoil.

303. I have no reason to question Mr Vaz's motives
in helping to organise the two gala dinners. But in any case there
is no evidence that Mr Vaz received a registrable benefit, either
personally or in the form of support for his office, from Mr Zaiwalla
through his sponsorship of the dinners.

c) The payment of £250 in January 1993

304. Some months after his initial denial, Mr
Zaiwalla provided me with documentary evidence, in the form of
an entry in his office cashbook, of a payment of £250 made
by him in January 1993 to Mr Vaz's "office account".
It remains unclear, however, whether the payment was made in cash
or by cheque.

305. Mr Vaz, at the outset of my inquiry, was
equally categorical in denying that he had ever received cash
payments of any kind from Mr Zaiwalla. Having been provided, however,
with the evidence of Mr Zaiwalla's cashbook entry, Mr Vaz has
come very close to accepting that such a payment was, indeed,
received by him or his office. Mr Vaz now says:

"... the earlier payment [£250] may
well have been a payment to a charity arising out of a suggestion
by [me] or could have been a part payment for the advert in the
[constituency] calendar."[172]

306. But these words are weakened by the following
sentence:

"This is speculation because [I] simply
[do] not know."

307. It seems unlikely that Mr Zaiwalla would,
in his cashbook, have described a donation to a charity by reference
to Mr Vaz's "office account". The second of the two
possible explanations offered by Mr Vaz for the payment is less
implausiblenamely that it related in some way to the calendar.
But the most probable reason for the donation is the straightforward
one given in Mr Zaiwalla's cashbook entry: support for Mr Vaz's
Parliamentary office.

308. Given Mr Zaiwalla's evidence for this payment
and, in particular, its documentary corroboration by the office
cashbook entry, it is surprising that Mr Vaz's own financial accounts
have not enabled him to provide me with the relevant information
about the purpose of the payment, or that his memory has not been
stirred sufficiently to enable him to give an unequivocal answer
on this point. It is also a matter of concern that Mr Vaz's reference
to an advertisement in the calendar contradicts his earlier assertion
that it contained no advertising.[173]

309. But in any case Mr Vaz has accepted (and
it is confirmed by his letter to the then Commissioner in January
1996) that the income from the calendars was intended to support
his personal staff or office equipment. A financial contribution,
for whatever precise purpose, towards the cost of producing the
calendars was therefore a form of sponsorship, the effect of which
was to enable Mr Vaz to maximise this source of funding for his
Parliamentary office.

310. There has been some inconsistency in the
terminology used by witnesses to describe Mr Vaz's office in the
constituency. Part of the confusion has arisen from the fact that
the Constituency Labour Party's office was for a time run from
Mr Vaz's house at 146 Uppingham Road, Leicester and Mr Vaz's Parliamentary
office was located in his adjoining property (number 144).

311. In the light of the information provided
by Mr Zaiwalla, including the cashbook entry mentioning Mr Vaz
by name, I am persuaded that a payment of £250 was made by
Mr Zaiwalla in January 1993 and that it was intended in some way
to support Mr Vaz's own (ie Parliamentary) office. I believe
that Mr Vaz could have been more candid and forthcoming in his
replies to my questions on this point.

312. However, even though this payment by Zaiwalla
did, in my view, constitute a benefit to Mr Vaz, he received advice
from the then Registrar in October 1994based on the interpretation
of the rules at the timethat support for the calendars
from individual donors did not have to be registered unless it
was made on a regular basis and their contributions exceeded £500.
Although this advice was couched in terms of payments for advertising
space, Mr Vaz was entitled to assume that it also applied to other
forms of sponsorship of his officewhether directly, or
indirectly through the calendars. It is not clear why Mr Vaz did
not seek advice from the Registrar about the first payment by
Mr Zaiwalla (the £250 in January 1993). But on the assumption
that he would have been given the same advice as he received after
the second, I do not think it would be fair to regard him as having
failed to register a registrable benefit.

d) The payment of £200 in September 1994

313. The evidence for the second of the two smaller
payments allegedly made by Mr Zaiwalla is, as with the first,
Mr Zaiwalla's own statements, corroborated by the office cashbook
entry for 29 September 1994, which indicates that a cheque for
£200 was drawn on Mr Zaiwalla's account on that day. The
purpose of the payment is given as " Wildberry[174]
(K Vaz Calendar)" and in the description column of the cashbook
the word "advertising" appears. Again, as with the earlier
payment of £250, it is not clear whether the cheque was actually
made out to Wildberry or to Mr Vaz, or whether it was used to
draw cash from Mr Zaiwalla's account.

314. Mr Vaz's account in relation to the £200
payment has followed the same pattern as his evidence concerning
the earlier donation of £250 by Mr Zaiwalla. An initial,
strongly worded denial has been modified by Mr Vaz, in the light
of the documentary evidence of the cashbook entry, into a partial
acknowledgement that a payment was made for a purpose linked with
himself. As Mr Vaz now puts it: "Doubtless, the second payment
by Mr Zaiwalla related to the calendar ...". But as in the
case of the earlier payment, this statement is qualified by the
following sentence: "This is speculation because [I] simply
[do] not know."

315. I again express my surprise that, despite
being prompted by the documentary evidence, Mr Vaz is unable to
make a more unqualified statement on this matter.

316. I am satisfied on the basis of Mr Zaiwalla's
evidence, supported by the cashbook entry, that the second of
these two payments, of £200, was made by Mr Zaiwalla in September
1994 and that its purpose was to help defray the costs of producing
and publishing a calendar. Given that Mr Vaz was personally associated
with the calendar (as is evident from its content and format),
this could reasonably be seen as a form of sponsorship of Mr Vaz
in his capacity as a Member, although for the reasons given earlier,[175]
Mr Vaz was entitled to believe that it was not a registrable benefit.
I consider more fully the question of the calendars later in this
part of my memorandum.[176]

333. In response to Mr Vaz's request for advice
on the registrability of Mapesbury Communications, the previous
Commissioner told him:

"Your current entry now shows your employment
as radio presenter, your membership of BPRI's panel and your income
from the calendar. Assuming you do not receive any personal income
or benefit from Mapesbury Communications, the present entry would
seem to be satisfactory."

334. I have not been able to establish from Mr
Vaz, now that the calendar project has been abandoned, where Mapesbury's
income comes from and what it is spent on. Mr Vaz has referred
me to information available from Companies House in the form of
the annual report and accounts. These documents do not, however,
specify either sources of income or the main objects of expenditure
funded by it. The amounts involved are not negligible. For example,
the turnover of the company in the latest year for which figures
are available was £73,764 in 1997-98 and £51,428 in
1998-99.

335. Another aspect of Mr Vaz's involvement with
Mapesbury which remains unexplained is why Mr Vaz said that after
the calendar project was abandoned the company continued to trade
with new officers and its own[178]
activities, when two members of his immediate family have been
directors throughout and the address for the register of members
is given as Mr Vaz's London home.

336. As I have indicated, on the basis of the
information he provided to the then Commissioner and Registrar
and the advice he received from them, Mr Vaz decided not to register
Mapesbury Communications, or the two payments of £250 and
£200 made by Mr Zaiwalla. On that basis, I express no criticism
of Mr Vaz. Nevertheless, I remain concerned about several aspects
of the way in which Mr Vaz dealt with my specific questions, as
well as the general way in which he gave his evidence, on these
matters.

337. Amongst my concerns are the following:

 the fact that Mr Vaz initially denied
any knowledge of payments by Mr Zaiwalla to him, or for any purpose
connected with him; that he persisted with that denial for several
months; and that he belatedly, as my inquiry was drawing to a
close, and then only when I provided him with the relevant documentary
evidence, made a partial and qualified admission that those payments
may have been intended for projects with which he was personally
associated

 Mr Vaz's failure, despite requests from
me, to clarify the confusion caused by his statement that the
calendars contained no advertisingwhich is contradicted
by the examples of the calendar for 1994 and 1995 supplied by
him to the Registrar giving rise to the possibility, not
acknowledged by Mr Vaz, that there were in fact two separate kinds
of calendar associated with him[179]

 Mr Vaz's unwillingnessostensibly
on the grounds that he had no involvement with the companyto
provide details of the expenditure and income of Mapesbury Communications,
when it was he who set it up and its officers, from its inception
until the present date, have been mainly members of his immediate
family.

338. The lack of co-operation from Mr Vaz on
the last of these matters is especially troubling since it has
prevented me from establishing whether any of the income of Mapesbury
Communications has been used to support Mr Vaz's Parliamentary
office in any way. I have received no evidence that this is the
case, although Mr Vaz told the then Commissioner in 1996 that
this would be the main purpose of the company. Mr Vaz was in a
position to clarify this uncertainty and chose, for whatever reason,
not to do so.